JLL answers the market’s demand for Industrial Service Facilities (“ISF”).
JLL has answered the market’s call for Industrial Service Facilities. With enthusiasm and optimism, over the last 12 months, JLL has organized resources to define and track a fragmented niche industrial property sub-type, creating a national team of market brokers who share data and trends, helping connect with occupiers, buyers and sellers. Furthermore, the JLL research team has established unique ways to filter data for our clients and brokerage team.
Industrial Service Facilities (ISF) generally consist of buildings less than 100,000 square feet with significant outdoor areas for storage and/or parking. The main guideline is that buildings have a low coverage ratio of land-to-building (20-25% or less) and in many cases, there is no building(s) at all. From the occupier’s needs, the outdoor area(s) are more important than the building area(s). Due to growth in e-commerce, shorter delivery windows, over-the-road trucking regulations, and port backlogs, ISFs are an essential part of the supply chain.
What is JLL research doing to help analyze ISF data? To start, JLL defines the ISF sector as having 9 different and unique sub-types.
“Sub-segmenting the data is crucial,” remarked George Cutro, director of industrial research. “Before, the main industrial categories were simply manufacturing, warehouse, flex and special purpose. For example, a truck terminal falls into the warehouse group, however, a truck repair facility or contractor yard would fall into the manufacturing group. We have also expanded our tracking of land property records and trailer and fleet parking lease comparables. We can now filter these properties through an additional layer, instead of taking the whole aggregate and manually filtering. The data is much cleaner for our clients.”
So, why is there such a demand for ISF now?
According to JLL ISF expert Robin Stolberg:
“A diverse mix of tenants, often significant credit ones, are demanding ISFs, and speculative construction is hindered due to municipal resistance, therefore supply growth is low. We work to connect occupiers and investors, building relationships that result in leasing and investment opportunities for increasing demand in the market.”
If you’re curious to learn more about industrial service facilities in the Chicagoland market, let me connect you with Robin and his colleague Dean Brody. They have a plethora of knowledge and can help you get ahead of this trend! Alternatively, you can check out the latest episode of Chicago Industrial Real Time, a podcast hosted by JLL’s research team: George Cutro and Chad Buch.